Unleashing Prague's Gambling Autonomy: A Fresh Take on Local Self-Regulation
In the Czech Republic, a court decision grants Prague administrative autonomy in the governance of gambling regulations.
By Matthias Friess, Edited by Angela Burke (Originally Published on: 07.05.2025. Updated on: 05.06.2025.)
- Prague Districts Embrace Self-Regulation of Gambling in the Future
- Astonishing 41 out of 57 Districts Have Already Nixed Live Casino Games
- Court Ruling Empowers Local Control and Addiction Prevention
Constitutional Court Paves Way for District-Specific Gambling Regulations in Prague
The Czech Republic's Constitutional Court (Ústavní soud České republiky) has given the green light for Prague's 57 districts to establish their unique rules regarding gambling [Link in English]. This groundbreaking decision allows these districts to set regulations tailored to their specific needs, from outright bans to time-based restrictions on games like poker and roulette.
Remembering the Roots: The 2021 Gambling Regulation
This decision takes root in the 2021 gambling regulation, which legalized live casino games in Prague. Meanwhile, the operation of slot machines remains prohibited citywide. Earlier, in 2023, both the Ministry of the Interior and the Czech Office for Competition Protection (ÚOHS) [Link in English] raised concerns over the validity of these requirements, considering them anti-competitive and vague.
However, these objections were dismissed by the Constitutional Court, who validated the regulations as in line with the Czech Gambling Act of 2016.
Gambling Regulations in the Czech Republic: A Snapshot
Gambling operators need a Czech license to legally offer their services, which is issued by the Ministry of Finance. The Czech Republic also boasts a national self-exclusion register (Rejstřík vyloučených osob), akin to Germany's OASIS blocking system, which provides a means for individuals with problematic gambling habits to protect themselves.
Prague Districts Vary in Gambling Regulations
At present, a staggering 41 out of the 57 Prague districts have opted for an absolute ban on live casino games, while others have imposed strict time-based restrictions. Only a handful allow casinos and live dealer games, albeit with minimal constraints, adaptable for future adjustments.
The Constitutional Court also emphasized the need for districts to address public concerns regarding gambling while making individual decisions according to the district's specific circumstances and needs.
Controversy Surrounding Divergent Gambling Regulations
Despite the ruling, Judge Milan Hulmák has expressed his disagreement with the disparity in gambling regulations within Prague, stating that he sees no compelling reasons to justify these differences.
A Challenging Landscape for the Gambling Industry
Recent investigations into tax evasion by the Czech financial authority have placed immense pressure on the gambling industry. Approximately 540 million CZK (approximately 22 million euros) in back taxes were demanded, with gambling providers also facing hefty fines for misleading statements to the tax authority.
Meanwhile, the Prague city council has welcomed this ruling, viewing it as an essential step towards fostering district autonomy and safeguarding the public.
Enrichment Data:
- Slots: The ban on slot machines citywide remains unchanged.
- Live Games: Despite the majority of districts implementing bans, some districts have chosen to allow casinos and live dealer games with minimal restrictions.
Districts and Time-Based Restrictions:
Impact on the Gambling Industry:
- Fragmented Market: Divided regulations could lead to challenges for gambling operators as they navigate different rules across the city.
- Gradual Advantages: Although the new regulations could pose initial difficulties, they also offer opportunities for districts to design rules that align better with their specific needs and preferences.
Future of Gambling Regulations:
- Decentralized Model: The success of Prague's model could encourage more municipalities to seek similar autonomy, fostering a more decentralized gambling regulatory framework in the Czech Republic.
- Risk-Based Regulation: Risk-based regulation may gain traction, potentially influencing future national gambling policies to prioritize protection against gambling-related harm.
Taxation:
- Tax Rates: Fixed-odds betting, live games, raffles, and small-scale tournaments are subject to a 23% tax rate, while lotteries and technical games are taxed at 35%.
- Tax Distribution: The tax revenue generated from technical games is divided between municipalities and the state in a 35:65 ratio. Other forms of gambling have a 70:30 split in favor of the state, with municipalities using their share to fund local initiatives or restrict gambling services, if necessary.
What about the possibility of district-specific sports regulations, similar to gambling?
This decision could pave the way for districts within Prague to develop unique sports regulations, tailored to their specific needs, much like they are now doing with gambling regulations.
